Chet Kanojia, founder and CEO of Aereo, Inc., shows a tablet displaying his company’s technology, in New York.

Web TV startup Aereo has stopped signing up new subscribers in New York, its biggest market, closing off one option for cord-cutters to watch this weekend’s Super Bowl.

The Barry Diller-backed service, which streams broadcast TV networks over the Internet for a subscription fee, blamed capacity overload for the move. In a statement, Aereo said “our team has been working overtime to add more capacity in our existing markets. As soon as additional capacity is added, new consumers will be notified that they can sign up and create an Aereo account.”

A spokeswoman noted that New York was the only one of Aereo’s 11 markets where signups had been stopped.

On Friday, Aereo Chief Executive Chet Kanojia tweeted from his Twitter account, “Yes we are sold out. Will reopen as we get more capacity deployed.”

An Aereo spokeswoman said the firm needed more antennae and accompanying hardware. That would imply a surprising ramp up in sales in just the past three months. Last fall, a walk-through of Aereo’s Brooklyn facility showed equipment that appeared to be supporting somewhere between 90,000 and 135,000 in New York. Aereo declined to comment on that estimate at the time but Aereo Chief Executive Chet Kanojia said then that the company could easily ramp up to support up to 350,000 subscribers in New York.

Aereo late Friday declined to comment on whether it’s reached the 350,000 mark. If Aereo is indeed sold out at 350,000, that means the startup would have added at least 215,000 subscribers in under four months.

The spokeswoman said that growth has been steady and that Aereo’s issues weren’t attributable to the Super Bowl or any particular television event triggering a sudden uptick in customers.

The spokeswoman ruled out other possible causes for the capacity issue, including power – the antennae guzzle power – or manufacturing. Aereo’s coin-sized antennas and transcoding equipment —which helps change the TV signal into a more efficient format to send over the Web — are designed and patented by Aereo. The firm sends the device designs to special vendors who manufacture the products for it. Only Aereo’s servers are off-the-shelf, but even those run on Aereo-created software.

Aereo is currently being sued by major broadcasters who say the service infringes their copyrights by retransmitting their broadcasts without their permission. Over the last year, lower courts had issued divided rulings on the legality of Aereo-like services, and both broadcasters and Aereo had appealed to the U.S. Supreme Court for intervention. The U.S. Supreme Court earlier this month agreed to hear the case, with oral arguments likely to start in April.

Comments (2 of 2)

For the sake of their existing customers, we'll hope that what they're saying is true. But given how little information we have on their operating model, one can't help but wonder what level of peak demand they have built out for, and whether tomorrow's SuperBowl might generate busy signals for customers.